African Pioneer Plc (LON: AFP) has signed a non-binding term sheet with Hong Kong-based Xinhai Mining Services Limited that could provide full financing and mine development services for its Ongombo and Ongeama Copper Projects in Namibia.
The agreement represents a significant step forward for African Pioneer, potentially removing the need for further project funding while accelerating the transition from exploration and resource development into commercial copper production.
Under the proposed framework, Xinhai would provide 100% of the funding required to achieve agreed development milestones, covering exploration, resource expansion, engineering, construction and commissioning activities. The company would also bring its extensive technical expertise, having completed more than 500 EPC (Engineering, Procurement and Construction) mining projects worldwide.
The copper projects are located just 30 kilometres from Windhoek, Namibia’s capital, providing access to established infrastructure and one of Africa’s most mining-friendly jurisdictions.
As part of the proposed transaction, Xinhai would subscribe for a 10% equity stake in African Pioneer at 1.15p per share, subject to final agreements and potential pricing adjustments. In addition, Xinhai would provide a secured project facility, with repayment potentially involving the issuance of up to approximately 74% of the project holding company.
The parties have entered into a 60-day exclusivity period to negotiate definitive agreements, although there can be no guarantee that a final transaction will be completed or that the terms will remain unchanged.
Chairman Colin Bird described the agreement as a transformative opportunity for the company, combining African Pioneer’s Namibian copper assets with Xinhai’s financial resources, engineering capability and mine development expertise.
If definitive agreements are completed, the partnership could significantly de-risk project development and provide African Pioneer with a clear route towards becoming Namibia’s next copper producer at a time when global demand for the metal continues to be supported by electrification and energy transition trends.
